ASX 200, China A50 look set to bounce: Asian Open

The bounce for the ASX nay end up being short lived, but price action suggests bulls might sneak in a 'last hurrah' over the near term. Meanwhile the China A50 continues to hold its ground and hint at a bounce of its own.

ASX 200 futures technical analysis:

A week last Tuesday, the ASX 200 saw a large sellers bar which finally broke it from its choppy range near its all-time high. Subsequent price action was a series of doji’s, where the majority of their daily ranges overlapped one another at the lower end of the big seller’s bar. Yet overnight price action has helped ASX 200 futures close at its highest level of the sideways range, which to me hints at another attempt higher today (even if we could then go on to see new lows on the daily chart thereafter.

The 4-hour chart shows two strong buyers bars out of the choppy range. Bulls could seek dips towards the monthly pivot point (8276) or the high-volume node of the consolidation (8245). I’m not looking for any too heroic, as ultimately it looks like the ASX may have at least one more leg lower on the daily chart. But a move up to 8325 or even the weekly R1 (8350) might be achievable for a cheeky long punt.

Alternatively, bears could wait to see if prices can bounce, then identify swing highs to align themselves with another leg lower oh the daily chart towards 8177, 8140 or 8100.

China A50 technical analysis:

It is difficult to say if or when the China A50 could bounce, but it continues to look like up could be its next notable moves. At least over the near term.

The rally from the September low to October high was nearly 50% in less than three weeks. Although the market retraced over 20% of those rapid gains over the next eight trading days. Yet the strong buyers bar at 13k and the 61.8% Fibonacci ratio provided the first clue that the retracement had found an important low. And subsequent price action has remained in a tight range in the top third of that buyers bar to suggest demand remains in place (even if a breakout is yet to occur).

The 4-hour chart shows dips towards 13,400 are being supported. Bulls could seek dips towards that level in anticipation of a move to 14,000, or the 2023 high (14,220).

Events in focus (AEDT):

10:30 – JP unemployment, job/applications ratio
13:30 – SG unemployment
14:35 – JP 2-year JGB auction
20:30 – UK consumer credit, money supply, mortgage approvals
22:30 – US retail inventories, wholesale trade, goods trade balance
01:00 – US consumer confidence (Consumer Board), job openings (JOLTS)
01:30 – US GDPnow (Atlanta Fed)

View the full economic calendar

-- Written by Matt Simpson

Follow Matt on Twitter @cLeverEdge

How to trade with City Index

You can trade with City Index by following these four easy steps:

Open an account, or log in if you’re already a customer

• Open an account in the UK
• Open an account in Australia
• Open an account in Singapore
Search for the market you want to trade in our award-winning platform
Choose your position and size, and your stop and limit levels
Place the trade

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.